A few years ago, it looked like we would all be driving pollution-free hydrogen-powered vehicles someday very soon. The signs, after all, were everywhere.

Automakers debuted concept vehicles with fuel cells under the hood. Investors poured money into hydrogen startups. News stories abounded about the new "hydrogen economy." Even President Bush, in his 2003 State of the Union message, said babies born in 2003 should be in hydrogen cars by the time they hit driving age.

But today, four years after that prediction, big technical challenges remain in using hydrogen to power passenger vehicles on a wide scale. These range from storing it safely aboard a car to producing it from something other than the fossil fuels it is supposed to replace.

That reality has caused hydrogen to lose some of its public momentum. And it is starting to make some predictions of when hydrogen cars could be in showrooms appear overly optimistic.

But hydrogen research is still making progress on many fronts, say oil companies, automakers, government officials and analysts. And despite the challenges, hydrogen appears destined to be at least part of the fuel mix for automobiles in the future.

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"In one way or another, everyone agrees this is where we'll ultimately arrive," said Mike Sutton, associate editor for Ward's Automotive Group in Southfield, Mich.

Because hydrogen is the most abundant element in the universe, there is basically an inexhaustible supply. Hydrogen also produces no emissions except water vapor when run through a fuel cell, a device that strips electrons from hydrogen and converts them into electricity that can be used to power a car or light a home.

That's why advocates say hydrogen could not only help meet the world's rising energy needs but also clean the air and combat global warming.

If just 20 percent of cars used fuel cell technology, the U.S. could cut oil imports by 1.5 million barrels every day, according to the U.S. Fuel Cell Council.

No fossil fuels

But since hydrogen does not exist in a free form, it must be extracted from water and fossil fuels like natural gas. It can be retrieved from water through a process called electrolysis, but removing it from natural gas is far more common and cheaper.

If hydrogen is going to have a bigger future with automobiles, backers acknowledge it must be produced from renewable sources or from water, not fossil fuels.

Wider use also will require breakthroughs in storage technologies, both on vehicles themselves and at fueling stations. Because hydrogen is far less dense than gasoline, the flammable gas must be kept at pressures up to 10,000 pounds per square inch, which may be unsettling to drivers. At fueling stations, it would require 50 times more space to store hydrogen than an equivalent amount of gasoline.

Those challenges have planted doubts with some policy-makers and investors.

"Biofuels have really sort of captured the stage," said Tammy Klein, executive director of Global Biofuels & Americas for Houston-based Hart Energy Consulting. "And I think the reason is because we can do it now. We don't need to wait 20, 30 years down the line to implement it."

The long development time for hydrogen technologies — and the slow rate of return — pushed 5 percent to 10 percent of hydrogen companies out of business last year, estimates Dan Bullock, with the Houston Advanced Research Center, which tests and evaluates fuel cell technologies.

Each automaker has a different timeline for launching hydrogen vehicles, with some saying the first models could appear as early as 2010, and most saying significant quantities won't appear in showrooms until about 2020.

General Motors Corp. is among the more bullish. The Detroit automaker predicts that by 2012 there will be about 10,000 hydrogen vehicles on the market from a variety of companies, said GM spokesman Scott Fosgard.

Yet some oil companies involved in hydrogen research suggest it may take longer.

"Instead of it just being around the 2010-2015 time frame, maybe it's 20 or 30 years from now,"said Rick Zalesky, vice president of biofuels and hydrogen at Chevron Corp., which does hydrogen research in Houston.

Exxon Mobil Corp. also said it could be decades.

Dave Austgen, Shell Oil Co.'s general manager for technology, is more optimistic. He believes a network of hydrogen cars and fueling stations should be in place by 2018.

"I would say, in many respects, things are happening faster than expected," he said, based on his experience from Shell's hydrogen research partnership with General Motors.

This month, BMW gave the keys of its first hydrogen-powered 7 Series sedan to actor Will Ferrell as part of an effort to put 100 of the vehicles in the hands of opinion leaders and celebrities. The German automaker is trying to sidestep some of hydrogen's storage problems by using liquefied hydrogen in the tank, which is denser than gaseous hydrogen. This allows BMW to use it to power a traditional internal combustion engine, although the liquid hydrogen must be stored at about 400 degrees below zero.

Focus on fuel cells

Other automakers are trying to avoid that storage problem by focusing on developing vehicles with fuel cells powered by hydrogen gas.

Under a five-year $170 million Energy Department program that began in 2004, oil companies and automakers have partnered to develop a fleet of fuel cell vehicles and fueling stations.

This year, a second generation of test vehicles will be added to the fleet. They all have improved driving range, more durable fuel cell systems, better road performance and storage tanks that contain more hydrogen in smaller-volume tanks, said Keith Wipke, an engineer who helps leads the program at the National Renewable Energy Laboratory in Golden, Colo.

He believes hydrogen programs have benefited from less attention. "It allows you to get some work done," he said.

One version of the energy bill now making its way through Congress would dedicate $3.7 billion over five years for hydrogen and fuel cell research as well as infrastructure to support hydrogen-powered cars — more than double the Energy Department's current budget.

But Bush has threatened to veto the bill because it does not do enough to encourage more domestic oil drilling.